Executive Member

The usury maximum interest rate, I’m not sure of it at all but you could argue about it to get the court to reduce the interest rate at 30 something %. A court might even cancel the agreement actually.

Banned

A month ago, a business associate gave me R5000.00 and I promised him to return it to him as R10 000.00 beginning of January, now we signed a contract and then it stipulated that I will pay R2500 extra if the money comes in later than 10 days. So the contract also stated that after the 10 days, he has the right to go file for a lawsuit and send me a debt summon and now he has contacted me today telling me that tomorrow he is going to file for a summon.

I made a few attempts to tell him that I will pay off his money by the end of the month, but he was adamant to stick to the contract, and so he refused and said he wants to use the law.

Now I don't know what to do because this is my 1st lawsuit, how will the letter be delivered to me? Will I be arrested or blacklisted? How does this whole summons and lawsuit process work?

Your agreement will not fall under the NCA. You will have no legal protection here. Chances are 100% you will get a judgment against you and that you will be blacklisted. So, you will have the next 10 years to pay him off and sort out your financial issues while the judgment prevents you from any further credit or accounts.

Banned

Any private person has the right to blacklist any person. Blacklisting is not only limited to companies or registered FSP's only. This is merely an agreement between two private parties and not an actual loan by a registered FSP. The agreement has not been honoured and there is a good chance a judgment will be granted. The person can send the judgment to ITC, pay the relevant fees and the judgment will be noted on the OP's credit record.

Last week I assisted a private individual in getting a builder blacklisted who did not complete his work. Court ruled he owed the client R1800 and issued judgment. ITC listed it against the builder.

Executive Member

As a personal loan, from an associate, there is zero chance of it affecting your credit rating and definitely will not get you blacklisted.
If it makes it to court, which is also unlikely, then there is a good chance that the court (especially small claims) will deem the terms extremely unfair and that the loan was made recklessly. The court will mediate and rework the terms to something that is more workable (maybe 25 - 50% interest) with a condition that it must be paid within a certain time limit.

You will not be arrested as this is not a criminal offence but rather a civil one. Relax, send the person you made the loan from an email stating that you want to work out something with him before he files a lawsuit (get everything on record) as it will show the court that you fully intended to make payment.